TOKYO, July 7 (Reuters) - Japanese shares fell on Wednesday, pressured by chip-related stocks, with worries over a resurgence of COVID-19 infections ahead of the Tokyo Olympics weighing on sentiment. The Nikkei share average slipped 0.86% to 28,394.73 by 0202 GMT, and the broader Topix dropped 0.65% to 1,941.71. The Nikkei was dragged down by chip-related shares, with Tokyo Electron slipping 0.98%, Advantest falling 1.34% and Shin-Etsu Chemical losing 3.67%. “It is still hard to find positive news to lift Japanese shares as the pace for vaccine rollouts is taking a pause and the number of coronavirus infections in Tokyo is on the rise, and we have the Olympics amid the pandemic,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities. Japan’s government is floating proposals that would ban fans from all events at this month’s Olympics which is set to start later this month, local media reported, as officials scramble to address public concerns about the spread of the coronavirus. Arisawa added the Dow’s weak finish overnight also pressuring Japanese stocks. Other local heavyweight stocks also declined. Fast Retailing, known for its Uniqlo brand clothing stores, also dragged on the Nikkei by falling 0.86%. Technology start-up investor SoftBank Group fell 0.54% as Didi Global, which it backs, fell as much as 25% in early U.S. trading on Tuesday after Chinese regulators ordered Didi’s app be taken down. All but the precision instrument maker sector of the 33 sector sub-indexes on the Tokyo exchange fell, with oil developers and steel makers leading declines. Scanners and sensors maker Keyence Corp rose 1.87% and was the best performer among the 30 core Topix names, followed by lens maker Hoya, which gained 1.52%. There were 16 advancers on the Nikkei index against 207 decliners. Reporting by Junko Fujita; Editing by Amy Caren Daniel Our Standards: The Thomson Reuters Trust Principles.